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CFTC approves amendments to NFA's Code of Arbitration and Member Arbitration Rules

The CFTC recently approved amendments to NFA's Code of Arbitration and Member Arbitration Rules. To allow more cases to be decided through summary proceedings and to be consistent with the arbitration rules of the National Association of Securities Dealers and other forums, NFA's new rules raise the dollar limit for summary proceedings to $25,000 for customer cases and to $50,000 for Member cases. Customer cases between $25,000 and $50,000 and Member cases between $50,000 and $100,000 will be oral hearings before one arbitrator.

"Parties in cases that are assigned an oral hearing by one arbitrator may request a full, three-arbitrator panel," says Cindy Cain, director of Arbitration. "However, they will be required to pay a higher hearing fee." Single arbitrators may also ask NFA to appoint two additional arbitrators to the case.

The dollar amounts for claims heard by three-arbitrator panels have been raised to over $50,000 for customer cases and over $100,000 for Member cases. These changes will apply to cases filed on or after May 1, 2001.

A rule amendment that goes into effect immediately concerns the electronic filing of certain case documents. After initial pleadings are filed in a case, NFA will accept and serve filings (e.g., letters and motions) by electronic mail or facsimile.

A third rule amendment relates to NFA's new pre-arbitration mediation program. The program, introduced earlier this year, is conducted by members of NFA's Legal Department who are trained and experienced mediators. NFA charges a $450 fee for its new mediation service, consisting of a minimal administrative fee and mediator session fees of up to four hours. NFA will charge an hourly fee of $100 for the mediator's service beyond four hours. The rule amendment allows NFA to suspend Members and Associates if they do not comply with pre-arbitration mediation settlements.

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